April 19, 2016 / 9:36 AM / 3 years ago

EU Commission is not consistent in applying fiscal rules: auditors

BRUSSELS (Reuters) - The European Commission is not consistent in applying fiscal rules requiring European Union states to keep budgets under control, EU auditors said on Tuesday.

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, in this file picture taken October 28, 2015. REUTERS/Francois Lenoir/Files

EU countries are obliged to keep their budget deficits below 3 percent of gross domestic product and to limit their debt to 60 percent of GDP.

If a country’s deficit is above the ceiling or its large debt does not decrease by enough, the European Commission and EU finance ministers set targets and deadlines to correct the imbalances under what is called an excessive deficit procedure (EDP).

The Commission “is not applying the procedure in a consistent manner,” EU auditors said in a report, adding that the EU executive has also been not effective in collecting reliable data from EU countries and pushing them to carry out necessary structural reforms.

The European Commission rejected this criticism, saying it was treating EU countries in an equal manner.

The European Court of Auditors (ECA), an EU institution charged with monitoring the bloc’s finances, urged the Commission to be more transparent in the way it assesses countries’ compliance with fiscal rules.

“There is still too little information openly available about the Commission’s data assumptions and parameters,” the report said, adding that this “raises questions about the overall reliability of its assessments.”

In remarks attached to the ECA report, the Commission said that it is fully committed to transparency and has made available detailed information on the main measures.

A Commission’s spokesman added that ECA’s contribution can be helpful to improve the EDP process, and stressed that “the Commission already commits to action in areas where the report identifies challenges and expresses concerns.”

The report audited the Commission’s application of the EDP between 2009 and 2015 in six EU states: Italy, France, Germany, Czech Republic, Cyprus and Malta.

The auditors said the Commission used “a high degree of flexibility and discretion” for Italy and France in 2015, deciding not to open an EDP against Italy despite a “prima facie” breach of the debt rule, while allowing France more time to bring its deficit below 3 percent in spite of data showing the procedure should have been made tougher.

Reporting by Francesco Guarascio; editing by Philip Blenkinsop

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